FinTech Special: Banking Chatbots Are Here to Stay – But Are They Safe?

The development of artificial intelligence has been called the next Industrial Revolution. Virtually every industry has been affected by AI and machine learning, and now banks are joining in on the action with the world’s first artificially intelligent bank tellers — in the form of chatbots.

In 2018, major players like J.P. Morgan Chase and Capital One unveiled customer-facing chatbots. And despite the fact that data breaches are at an all-time high — with 178 million records breached in 2017 alone — the public isn’t hesitating to put their sensitive banking data into the virtual hands of chatbots. In fact, Bank of America’s chatbot, Erica, gained a million new users within two months of launching.

With success like that, it’s clear banking chatbots aren’t going anywhere. But how will they change the way we bank? And can artificially intelligent tellers truly be trusted with sensitive information?

Goodbye to Banking Hours

From transferring funds to depositing a check, at-home banking is nothing new. With the rise of mobile banking, many of the services that once required an in-person visit to the bank are now accessible 24/7. So how are chatbots taking this experience to the next level?

When we think of chatbots, we often think of the friendly customer service bots that pop up in our browser windows. But according to Zor Gorelov, founder of natural speech platform SpeechCycle, chatbots are just one part of consumers’ experience with AI. “You can think of [chatbots] as an omni-channel banking brain,” says Gorelev. “Consumers interact with our AI-powered bots and virtual assistants on websites, mobile apps, SMS, and messaging platforms like Facebook Messenger.”

For big banks, chatbots are a win-win. They provide improved customer service, and they allow banks to cut workforce funds. When J.P. Morgan introduced its customer-facing chatbot, the company saved an estimated 360,000 hours of workforce time.

Banking Gets Personalized

Thanks to banking chatbots like SpeechCycle, customers have the option of more than just at-home banking through an app or website. They now have access to an omni-channel banking experience at all times. And one that’s extremely personalized.

For customers, the personalization that AI bots provide means more convenience. They can request bank statements, view their earnings, move funds, learn about new services and ask questions — all in one centralized location.

But while customers may benefit from these optimized banking experiences, banks stand to gain even more. AI not only gives banks an opportunity to optimize their customer experience while saving on labor costs — it also gives them an unprecedented amount of user data.

Based on data collected from chat logs, banks are able to uncover their customers’ common pain points and frequently asked questions. They’re also able to serve highly targeted advertising. By analyzing users’ profile data, major life events and chat requests, chatbots are able to provide customers with hyper-targeted marketing — solving user problems with relevant services and guaranteeing higher conversion rates at a lower cost, and with less risk of pestering potential customers.

Employees Need Chatbots, Too

These days, chatbots are doing more than just helping consumers. It’s estimated that by 2020, 40 percent of customer-facing workers, including government employees, will use some form of AI support to help consumers on a daily basis.

Companies are exploring the ways employee-facing virtual assistants could improve their operations, and banks are no exception. Internal AI agents could free up human workers to do more complex and important tasks. And just like consumer-generated data, employee-facing chatbots provide an opportunity to collect data on employee pain points and bottlenecks in work processes.

Can Chatbots Keep Our Money Safe?

From SMS to smartphone apps, AI-powered assistants are making banking more accessible than ever. In fact, MasterCard even offers AI-powered chat services through Facebook.

But as with all omni-channel endeavors, more channels mean more opportunities for cyberthieves to gain access to sensitive financial information. Can bank customers really trust their virtual bank tellers with their personal information?

The answer depends on the banks themselves. Maintaining a secure database while also offering AI services is certainly possible, but banks must stick closely to cybersecurity best practices if they hope to keep their customers’ data safe. That means upholding the three pillars of cybersecurity: people, processes and technology. With proper employee training, secure work processes and consistently updated IT and security services, big banks should be able to fend off any cybersecurity threats.

Securing Data in an Omni-Channel World

Don’t let cyberthieves stop your company from innovating. Bluefin offers P2PE and tokenization services that ensure sensitive data is encrypted the moment it enters your system. To learn more about how you can protect your customers’ data, contact a Bluefin representative today.

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